Dollar General (DG): Buy Ahead Of Results On 12/1 - Buckingham
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Buckingham Research analyst, John Zoldis, reiterated his Buy rating on shares of Dollar General (NYSE: DG) ahead of 3QFY16 results on 12/1 pre-open.
Following disappointing results last quarter, investors are cautious on DG, citing a litany of unfavorable factors including deflation, SNAP declines, increased competition, and choppy consumer spending. The third quarter will also be hurt by the shift of some Halloween-related sales into 4QFY16 (we estimate 20-30 bps impact). However, the analyst notes that the sell-side has already significantly reduced estimates and believes buy-side expectations are even lower with some talking about negative 1% comps in the current quarter.
The analyst stated "We doubt it will be this bad (other discounter results were stable in 3Q) and note that DG has only reported negative quarterly comps 2x since FY98. We are buyers in front of results based on this sentiment, the company’s LT growth opportunity, its outstanding financials (among the best in all retail), and consistent performance".
No change to the price target of $90.
Shares of Dollar General closed at $80.06 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change
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